Academic journal article Health Care Financing Review

Trends in State Health Care Expenditures and Funding: 1980-1998

Academic journal article Health Care Financing Review

Trends in State Health Care Expenditures and Funding: 1980-1998

Article excerpt


State health expenditure accounts (SHEA) are measures of personal spending for health care services and products by the State in which providers are located. Levels of spending, growth in spending over time, and the mix of services purchased with the health care dollar vary considerably among States and regions. The SHEA allow researchers and State and Federal policymakers to track broad historical trends in unique State health care systems, evaluate the effects of historical policy decisions on the delivery of health care services, and envision and model possible effects of future policy proposals (Long, Marquis, and Rodgers, 1999).

The SHEA follow the definitions and draw on many of the data sources used in producing national health expenditures (NHE), although SHEA are more limited than the NHE in that they include only personal health care (PHC) expenditures (refer to the Definitions and Methodology section). Expenditures for PHC include spending for hospital care, physician services, dentist services, other health professional services, home health care, nursing home care, and health care products purchased in retail outlets (such as prescription drugs or over-the-counter medicines sold in pharmacies and grocery stores, and eyeglasses sold in optical goods stores). Included in NHE, but not SHEA, are estimates of spending for public health programs, administration, research, and construction of health facilities.

In this article, we present the latest SHEA for calendar years 1980-1998 and update previously published estimates that contained data through 1993 only (Levit et al., 1995). Estimates by type of service and by Medicare and Medicaid are presented, as well as highlights of State-level variations in health care spending and financing. All State health expenditure estimates can be found at nhe-oact/stateestimates.


At least 13 States (Alaska, Colorado, Delaware, Florida, Kansas, Maryland, Minnesota, New Mexico, New York, Oregon, Washington, Wisconsin, and Vermont) have created current and/or historical measures of health spending.

Several States have enacted legislation requiring State agencies to produce health spending reports for policymaking, and some have authorized data collection to provide source data for this activity. (Legislatures in the States of Florida, Maryland, Minnesota, and Vermont require regular reporting on State health expenditures. Maryland and Minnesota both enacted legislation requiring providers and/or health plans to report financial information.) Some States have initiated efforts to track health spending in an attempt to create policies to reign in the fast spending growth in their health care markets (Alaska State Legislature, 1993; Blewett et al., 1999). Other States noted reasons such as a desire to understand and analyze their own health care industry (Colorado Department of Health Care Policy and Financing, 1998), improve access to care for State residents (Ratledge and Mrozinski, 1998), improve health care budget forecasts (Insurance, Securities and Health Care Administration, 1999), and gain insight into the provision of care for special population groups (Agency for Health Care Administration, 1999).

For State policymakers, these individual State reports hold certain advantages over CMS's uniformly produced State estimates in that the State reports frequently present more detailed estimates of health spending designed to meet specific health policy needs of individual States (State of New York Department of Health, 1995; Washington State Office of Financial Management, 1997; Reynis, 1998; State of Maryland Health Care Access and Cost Commission, 1998). Most States, however, face severe resource and data constraints and lack staffing continuity, making it difficult to produce and maintain their own health spending accounts (Long, Marquis, and Rodgers, 1999). …

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